Fraud, Arbitrator Impartiality, Arbitrator Misconduct, and Arbitrator Exceeding Power Type Claims Could Not Be Found Immune From Review Based On Contractual Provision.
In In re: Wal-Mart Wage and Hour Employment Practices Litigation, Case No. 11-17778 (9th Cir. Dec. 17, 2013) (published), a district court confirmed an arbitration award allocating attorney’s fees in a wage/hour big litigation matter. Based on a broad non-appealability clause in the arbitration contract between the parties eliminating all federal review of arbitration awards, including awards subject to attack under Federal Arbitration Act § 10, one party claimed the Ninth Circuit could not entertain review of the merits.
Wrong, said the federal appeals court. This clause was simply unenforceable. Section 10 of the FAA did allow for review of fraud, arbitrator impartiality, arbitrator misconduct, and arbitrator exceeding power claims, and a clause attempting to eliminate review of such grounds simply violated minimal due process challenges Congress intended to govern arbitrations.
So, the merits could be reviewed, although the panel did affirm the district court’s confirmation of the award in a separate unpublished memorandum decision.